Citing a strong rebound in demand in the United States and Europe in the first quarter, LVMH Moët Hennessy Louis Vuitton reported an 11.3 percent increase in revenues as stores began restocking their shelves with Champagne, watches and perfumes.
Sales in the three months ended March 31 totaled 4.47 billion euros, or $6.2 billion, versus 4.02 billion euros, or $5.26 billion, in the year-ago period. Dollar figures are converted at average exchange rates for the periods to which they refer.
In organic terms, meaning with like-for-like structure and at constant exchange rates, the revenue increase stood at 13 percent.
“This bodes well for the rest of the year,” chief financial officer Jean-Jacques Guiony said during a conference call with analysts, hastening to add, “Yet at this point, we should not take a market recovery for granted.…Things seem to be better, but we still need to be cost conscious.”
The French group also stopped short of giving precise sales or earnings guidance, saying only that it aimed to increase its leadership in the luxury goods sector this year.
Still, the first-quarter numbers, reported before trading began on the Paris Bourse, beat analysts’ expectations, bumped up the stock price of LVMH and nudged some other luxury issues. Shares in LVMH ended Tuesday up 1.5 percent to close at 90.05 euros, or $122.51 at current exchange.
The world’s largest luxury goods maker reported double-digit organic increases across all its business divisions: up 10 percent in fashion and leather goods; 12 percent in perfumes and cosmetics; 13 percent in selective retailing; 20 percent in wines and spirits, and 34 percent in watches and jewelry.
LVMH said distributors of Champagne, which had been in de-stocking mode last year amidst the economic crisis, registered a significant increase in volumes in the first quarter. “This is a very healthy trend,” Guiony noted. “We are very far from excess inventory.”
Demand for Hennessy cognac remained solid in all regions, particularly in Asia during the Chinese New Year period, LVMH added.
It was the same story for the watches and jewelry business group, as retailers resumed orders for timepieces, detecting a recovery in demand from the final consumer since the holiday period.
Distributors of perfumes and cosmetics also beefed up inventories, with LVMH citing strong demand for Givenchy perfumes and Dior mascaras.
The Louis Vuitton brand headlined gains in the fashion and leather goods division with an “exceptional” performance across historic leather goods lines and an “excellent” start to the year for men’s shoes and ready-to-wear. Fendi also had a “very good start to the year,” LVMH noted.
The fashion and leather goods division racked up sales of 1.73 billion euros, or $2.4 billion, versus 1.6 billion euros, or $2.09 billion, a year ago.
Other fashion brands, such as Donna Karan and Marc Jacobs, registered a “pretty strong” performance in the quarter in their own retail stores, however, “wholesale was weak, down close to double-digits in the quarter,” Guiony said. He also noted Celine closed “a few stores” in the period as the brand repositions with a new product offer under creative director Phoebe Philo.
To be sure, the rebound in some regions was dramatic, with sales in the quarter in local currencies jumping 20 percent in the U.S. and 11 percent in Europe. Asia continued at a strong pace, up 20 percent, while Japanese sales fell 7 percent as the island nation remained saddled with anemic consumer demand. Only watches and jewelry registered a small uptick in sales in Japan, up 1 percent, while fashion and leather goods registered a “high-single-digit increase,” Guiony noted.
In contrast, watch and jewelry sales jumped 58 percent in America and 75 percent in Asia. Selective retail also bounced back strongly, with tourists from China flowing into DFS gallerias in Hong Kong, Macau and Singapore. Sephora registered comp-store gains in all regions and will christen its 1,000th store in the second quarter.
Separately on Tuesday, Christian Dior SA, parent of LVMH and the fashion house Christian Dior Couture, reported results also pointing to luxury’s comeback.
Revenues at the Dior fashion house rose 6.5 percent to 180 million euros, or $249.4 million, versus 169 million euros, or $221.1 million, a year ago. At constant exchange rates, the gain amounted to 8 percent.
“Retail activity confirmed its growth momentum with an increase in sales of 16 percent at constant exchange rates,” Dior said. “All regions contributed to this performance: Asia and Europe, but also America, which has seen a strong rebound.”
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